What is Life & TPD Insurance?

Karen Grainger

This is not a pleasant topic to raise but one we all should consider.

Have you thought about insuring your life or covering your life for unexpected events?

There are a number of different insurance policies designed to protect you when disasters happen in your life.

Life Insurance

Life insurance can also be called death cover, and pays a lump sum amount when you die. The money is paid to people you nominate as beneficiaries on the policy.

If you have a partner or dependents, life insurance can assist them cover any debts and future living costs after your passing.

To determine how much cover you need, you should consider how much you would need to payout the mortgage, credit cards and other debts. Also, what funds would be required to cover future schooling fees and other living expenses for your dependants.

Total and Permanent Disability (TPD) Insurance

TPD insurance pays a lump sum if you become totally and permanently disabled because of an illness or injury.

Depending on the definition of the insurer, TPD can cover you for either your own occupation or any occupation.

When covering your own occupation, the policy covers you when you are unable to work again in the job you had before your disability. This insurance is generally more expensive and usually is only available outside superannuation.

When covering any occupation, the policy covers situations when you are unable to work ever again, in any job suited to your education, training or experience. This insurance is generally cheaper but has a higher threshold to claim.

When purchasing a Life or TPD insurance policy, you can discuss your needs further with a licensed insurance broker, financial adviser or an insurance company.

You will need to consider your age, job, income, medical history, lifestyle and living costs and any high risk hobbies and activities you do.